Back Him or Sack Him

13 October 2003


Japan's Koizumi Calls Election for 9 November

Fresh from a huge re-election bid as leader of Japan's Liberal Democratic Party, Prime Minister Junichiro Koizumi dissolved the Japanese Diet and called for new elections in just over four weeks. With the party solidly in his corner and his good friend President George Bush coming to Japan this week, there was not likely to be a better time to strike. Yet, as with many elections, the winner may come out worse off than the loser.

It is no secret that Japan's economy has been miserable for over a decade. And despite signs that things are improving there, unemployment remains at historically high levels and the yen is strong, which damages Japan's export businesses. Even the prime minister's election platform shows the depths to which Japan has sunk -- he promises to get GDP growth up to 2% next year, an increase from 1.3%. This is not a lack of ambition; it is actually very optimistic. When 2% growth is optimistic, things are bad and have been bad for ages.

The opposition Democratic Party is unlikely to defeat the LDP. Even if the incumbent party loses its overall majority in the 480 seat lower house, its junior partners in power, the Buddhist-backed New Komeito and the New Conservative Party, are likely to keep Mr. Koizumi as prime minister.

Oddly, the real opposition to the prime minister will come form his own party, despite his recent success in the leadership campaign. One of his big plans for the next few years is to privatize the Japanese Post Office. This would be a major step forward, especially in light of just how much money is in Post Office accounts in Japan. However, the LDP relies on the postal workers during each election. California, it seems, does not have a monopoly on special interests. Like California's new governor, though, the next Japanese cabinet will have a lot of pain to inflict before any gain is shown.

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